Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 pounds & $2.00 per pound) $ 60.00 Direct labor (20 hours $4.50 per DLH) 90.00 Variable overhead (20 hours @ $2.90 per DLH) 58.00 Fixed overhead (20 hours $1.20 per DLH) 24.00 Standard cost per unit $ 232.00 The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,950 units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information is available. Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhend Variable overhead Pixed overhead Total overhead Operating Levels of capacity) 601 658 701 37,800 40,950 44,100 756,000 819,000 882,000 $ 2,192,400 $ 2,375, 100 $ 2,557,800 982,800 982,800 982,800 $ 3,175,200 $ 3,357,900 $ 3,540,600 During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead $ 2,120,000 Actual fixed overhead 1,065,000 Actual total overhead $ 3,185,000 Exercise 23-27A (Algo) Computing total variable and fixed overhead variances LO P5 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) Standard DL Hours -A100% of Operating Capacity Overhead Costs Actual Results Variance Applied Fav/Unf Variable overhead applied Fixed overhead applied Yotal overhead variance Predetermined OH Rate $ 2.90 1.20 $ 4.10 AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance. Required 1 Required 2 Required 3 Compute the variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or per unit" to 2 decimal places.) Actual Variable OH Cost Flexible Budget Standard Cont (VOH applied) $ 0 Required 1 Required 2 Required 3 Compute the fixed overhead spending and volume variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no vi decimal places.) Actual Fixed cost Fixed OH (Fixed Budgeted) Standard Cost (FOH applied) $ 0 Required 1 Required 2 Required 3 Compute the controllable variance. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Controllable Variance Controllable variance